NOTE 2 INVESTMENTS

The Company’s investment portfolio consists of marketable equity securities and warrants of certain publicly-traded companies. As at December 31, 2017, the Company classified the marketable equity securities as available-for-sale securities, which are recorded at fair value based upon quoted market prices with changes in fair value recorded in Other Comprehensive Income (Loss) (“OCI”). The gains and losses on available-for-sale securities are not reported in Net (Loss) in the Statement of Operations until the securities are sold or if there is an other-than-temporary decline in fair value below cost.

The Company adopted ASU 2016-01 as of January 1, 2018 and as a result has reclassified the beginning accumulated OCI balance of $3.0 million related to marketable equity securities to beginning Accumulated Deficit (see Statement of Changes in Shareholders Equity). As a result of adoption of this guidance, the Company now recognizes changes in fair value of these securities in the Statement of Operations. During the three and six months ended June 30, 2018, the Company sold marketable equity securities for proceeds of $0.2 million and $3.7 million, respectively. The Company realized a loss of $0.03 million and $0.8 million on the sales for the three and six month periods ended June 30, 2018, which is included in the Statement of Operations. During the comparable period ended June 30, 2017, the Company sold $2.2 million of marketable equity securities resulting in a realized gain of $0.8 million. During the three and six months ended June 30, 2018, the Company had an unrealized loss on equity securities in the amount of $0.5 million and $1.6 million respectively, which is included in the Statement of Operations. This is compared to an unrealized loss of $0.7 million and an unrealized gain of $1.1 million in the three and six month periods in 2017.

The Company maintains a portfolio of warrants on equity interests in publicly-traded securities for investment purposes which are not used in any hedging activities. On May 30, 2018, the Company exercised on a portion of warrants and continues to hold certain warrants. The exercise price and the cost to purchase the warrants was capitalized to Marketable Equity Securities. As the warrants meet the definition of derivative instruments, unrealized gains or losses arising from their revaluation are recorded in the Statement of Operations. For the three and six months ended June 30, 2018, the Company recorded an unrealized loss of $nil and $0.9 million (June 30, 2017 – $0.7 million loss and $1.1 million gain).

The following is a summary of the balances of Investments as of June 30, 2018 and December 31, 2017:


							Other		Statement of
	Opening		Additions		Disposals		Comprehensive		Operations		Fair Value
	balance		during		during		Income (Loss)		(Loss)		end of the
As of June 30, 2018	(January 1)		period		period		(pre-tax)		Income		period
Marketable equity securities	$	6,404	$	1,211	$	(3,666)	$	—	$	(1,637)	$	2,312
Warrants		1,567		—		(704)		—		(863)		—
Investments	$	7,971	$	1,211	$	(4,370)	$	—	$	(2,500)	$	2,312


							Other		Statement of
	Opening		Additions		Disposals		Comprehensive		Operations		Fair Value
	balance		during		during		Income (Loss)		(Loss)		end of the
As of December 31, 2017	(January 1)		year		year		(pre-tax)		Income		year
Marketable equity securities	$	6,749	$	—	$	(2,163)	$	1,334	$	484	$	6,404
Warrants		1,794		—		—		—		(227)		1,567
Investments	$	8,543	$	—	$	(2,163)	$	1,334	$	257	$	7,971

As of June 30, 2018, the cost of the marketable equity securities and warrants was approximately $2.0 million (December 31, 2017 - $3.3 million).